Robeco meets with Vice President of Brazil to discuss deforestation

Robeco’s CEO Gilbert Van Hassel and Chief Investment Officer a.i. Victor Verberk participated, together with C-level representatives of eight other global investors, in a meeting with the Vice President of Brazil to discuss the issue of deforestation in the Amazon. Robeco has identified biodiversity as one of its key sustainability topics next to climate change. We recognize the crucial role that tropical forests play in tackling climate change, protecting biodiversity and ensuring ecosystem services.

The performance of countries when it comes to Environmental, Social and Governance factors is relevant information for us as investors. Robeco encourages the Brazilian government to show better ESG performance going forward. This would make Brazil a more attractive economy for us and other investors to invest in. For more than 25 years now Robeco has invested in listed equity, government and corporate bonds in Brazil.

Victor Verberk, Chief Investment Officer a.i. at Robeco, stated during the meeting: “We evaluate the ESG performance of Brazil as part of our investment allocation decisions, both for sovereign debt and for equity/credits. Important to note is that we evaluate the ESG performance for 150 countries globally. For each country we assess its strengths and weaknesses. How Brazil deals with deforestation and climate change is a financially material topic for us. We regret that the overall ESG country score of Brazil has deteriorated in the past years.

The investor group raised five issues which will be important for our assessment of progress in Brazil going forward:

  • Significant reduction in deforestation rates, i.e. showing credible efforts to comply with the commitment set down in Brazil’s Climate Law, Article 19.

  • Enforcement of Brazil’s Forest Code.

  • The ability of Brazil’s agencies tasked with enforcing environmental and human rights legislation to carry out their mandates effectively, and any legislative developments that may impact forest protection.

  • Prevention of fires in or near forest areas, in order to avoid a repetition of fires like in 2019.

  • Public access to data on deforestation, forest cover, tenure and traceability of commodity supply chains.

Robeco acknowledges that the Brazilian government expressed its commitment to fight deforestation in the country. Going forward, we would welcome the opportunity as an investor group to engage with relevant Ministries and the Central Bank to support the government's efforts in halting deforestation. The Minister of Agriculture offered that her technical experts are available to meet and discuss our questions on specific data. We will reach out to the various ministries to request follow-up meetings to discuss our five outcomes.

To conclude, we would like to express our gratitude to Vice President Hamilton Mourão, Minister of Foreign Affairs Ernesto Araújo, Minister of Agriculture Tereza Cristina, Minister of Environment Ricardo Salles, and the President of the Central Bank, Roberto Campos Neto for hosting this meeting. We greatly appreciate their willingness to meet with us and discuss our concerns about the risks that deforestation poses to our long-term financial interests and those of our clients.

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